PUBLIC MATTER DESIGNATED FOR PUBLICATION Filed …

Opinion Frm (20190813)

PUBLIC MATTERmdashDESIGNATED FOR PUBLICATION

Filed September 30 2020

STATE BAR COURT OF CALIFORNIA

REVIEW DEPARTMENT

In the Matter of ) No 16-O-17714

)

JOSEPH EARL MARTIN ) OPINION AND ORDER

)

State Bar No 189752 )

)

In his first disciplinary matter Joseph Earl Martin was charged with two counts of

misconduct both based on violations of former rule 4-100(A) of the California Rules of

Professional Conduct1

Specifically the Notice of Disciplinary Charges (NDC) alleges Martin

deposited personal funds into and paid personal expenses from his client trust account (CTA)

on multiple occasions and thus improperly commingled those funds The hearing judge found

Martin culpable of both counts In recommending a 90-day actual suspension the judge

determined that Martin failed to demonstrate that a lesser sanction under standard 22(a)2

was

warranted

Martin appeals He argues that he did not commingle his personal funds in the CTA

because no client money was ever deposited into it Further he asserts he had a good faith belief

that his actions did not violate any ethical rule and that because the State Bar never provided

him notice that he was violating rule 4-100(A) before charges were filed he was not afforded

1 All further references to rules are to the Rules of Professional Conduct that were in

effect from September 14 1992 to October 31 2018 unless otherwise noted

2 Standard 22(a) of the Rules of Procedure of the State Bar title IV Standards for

Attorney Sanctions for Professional Misconduct provides that ldquoActual suspension of three

months is the presumed sanction for commingling rdquo Further references to standards are

to this source

due process and thus should not be found culpable for violating the rule Finally Martin also

asserts he has sufficient mitigation to warrant less discipline and seeks a private reproval The

Office of Chief Trial Counsel of the State Bar (OCTC) does not appeal the hearing judgersquos

findings and requests that we uphold her recommendation

Based on our independent review of the record (Cal Rules of Court rule 912) we affirm

the hearing judgersquos culpability findings because commingling within the meaning of rule 4-100(A)

occurs when an attorney maintains personal funds in a CTA even if no client funds are in the

account (Doyle v State Bar (1982) 32 Cal3d 12 22ndash23) We do however find aggravation for

only one of the two aggravating circumstances found by the judge and give more weight to

Martinrsquos mitigating circumstances Overall the mitigation clearly outweighs the aggravation and

therefore we conclude the record supports a downward departure under the standards We order

Martin be publicly reproved with conditions which will under the circumstances established here

be sufficient to protect the public the courts and the legal profession

I PROCEDURAL BACKGROUND

OCTC filed a NDC on December 6 2018 alleging two counts of misconduct against

Martin both charging violations of rule 4-100(A) A one-day trial took place on April 5 2019

Before the trial on April 4 the parties filed a pretrial Stipulation as to Facts and Admission of

Documents (Stipulation)3

The hearing judge issued her decision on July 15 2019 following a

period for posttrial briefing

3 At the beginning of the trial the hearing judge granted Martinrsquos request to withdraw

from stipulating to the admission of bank records as exhibits based on his argument that his

stipulation of facts rendered those records unnecessary A review of the transcript shows many

exhibits were only partially admitted with OCTC agreeing that some records that had been

contained in the Stipulation did not need to be admitted

-2-

4II FACTUAL BACKGROUND

Martin was admitted to practice law in California on August 27 1997 At some point in

2004 he opened a CTA at JP Morgan Chase Bank (Chase Bank) which he never used to accept

hold or disburse client funds OCTC and Martin stipulated that between October 1 2016 and

July 26 2017 Martin made several deposits into and multiple withdrawals from his CTA

totaling $5218863 in deposits and $4686939 in withdrawals5

All deposit and withdrawal

activities were personal in nature

Between October 2016 and July 2017 OCTC received copies of six non-sufficient fund

(NSF) notices sent to Martin from Chase Bank pertaining to his CTA OCTCrsquos receipt of these

notices prompted it to contact Martin Specifically OCTC sent Martin investigative letters

seeking information about at least two NSF checks (check nos 1161 and 1307) In three of these

letters one each sent on December 13 2016 May 19 2017 and July 11 2017 the following

warning was included ldquoFAILURE TO PROVIDE THE DOCUMENTS REQUESTED [ ]

WHICH [YOU ARE] REQUIRED TO MAINTAIN PURSUANT TO RULE 4-100(C) [hellip]

MAY BE CONSIDERED A VIOLATION OF RULE 4-100(B)(3)rdquo A complete copy of

rule 4-100 was enclosed with each letter6

4 The facts included in this opinion are based on the Stipulation trial testimony

documentary evidence and the hearing judgersquos factual findings which are entitled to great

weight (Rules Proc of State Bar rule 5155(A))

5 As established by the Stipulation Martin made the following deposits into his CTA 20

deposits from Legal Management Quickbooks (paychecks) six deposits from Spaulding Campri

LLC (payments for his work as an independent contractor) and two cash deposits Martin made

the following payments from his CTA 68 checks to K Martin (his ex-wife) 49 cash

withdrawals 11 payments to Target seven payments to V Paul (his landlord) three checks to

the Department of Motor Vehicles and two payments to Kaiser Pharmacy

6 Rule 4-100 provides in relevant part that ldquo(A) All funds received or held for the

benefit of clients by a member shall be deposited in a [CTA] No funds belonging to the

member shall be deposited [into the CTA] or otherwise commingled

(B) A member shall (3) Maintain complete records of all funds securities and other

properties of a client coming into the possession of the member

-3-

Martin testified he reviewed the letters from OCTC as he received them along with the

enclosures that set forth rule 4-100 in its entirety His understanding of the warnings in the

letters was that OCTC was seeking records from him to prove he did not have client money in

his CTA which he was using for personal funds His assessment of OCTCrsquos letters comported

with his belief at the time that a violation under rule 4-100 would occur only if he was combining

his personal money with client money in the CTA His belief was based on subsection (A)rsquos

phrase ldquoor otherwise commingledrdquo which he interpreted to mean that all the language of

subsection (A)rsquos prohibition applied only where mixing of client money and personal money

occurred in the CTA Because he never had client funds in his CTA he concluded the rulersquos

prohibition did not apply to him

Martin obtained counsel who answered questions from the OCTC investigator and

provided CTA records on February 7 2017 after receiving an extension On March 10 his

counsel sent an email to OCTC stating Martin told him that he had opened a regular checking

account and planned to close his CTA once OCTCrsquos investigation concluded Martinrsquos attorney

also attached additional financial records from the CTA The email pointed out that as a

criminal defense attorney Martin did not receive administer or disburse client funds At trial

Martin testified he intended to open a regular checking account at the time his counsel wrote the

email However on March 17 he started a serious child molestation case in Sacramento that

ended a few days before he suffered a heart attack on April 5 He continued to use the CTA for

personal purposes until July 26 2017

(C) The Board of [Trustees] shall have the authority to formulate and adopt standards

as to what lsquorecordsrsquo shall be maintained by members in accordance with subparagraph

(B)(3) The standards formulated and adopted by the Board shall be effective and binding on

all membersrdquo

-4-

III MARTIN IS CULPABLE ON BOTH COUNTS

Count one of the NDC alleges that between October 1 2016 and July 26 2017 Martin

deposited or commingled funds belonging to him in his CTA in willful violation of rule 4-100(A)

In count two the NDC alleges that Martin issued checks and made electronic withdrawals from

his CTA to pay personal expenses during the same time period in willful violation of the same

rule The hearing judge found that by placing $5218863 of personal funds in his CTA (count

one) and paying $4686939 in personal expenses from his CTA (count two) Martin was culpable

as charged We agree

On review Martin first argues due process requires he be given notice during any

investigation that his conduct violates a specific rule before OCTC can charge him with a

violation He is mistaken Generally ldquoThe fundamental requirement of due process is the

opportunity to be heard lsquoat a meaningful time and in a meaningful manner [Citations]rsquordquo

(Matthews v Eldridge (1976) 424 US 319 333) In California disciplinary proceedings

ldquoadequate notice requires only that the attorney be fairly apprised of the precise nature of the

charges before the proceedings commencerdquo (Van Sloten v State Bar (1989) 48 Cal3d 921

929) In the NDC filed in this case notice of the specific facts comprising the violation and the

specific rule violated were pleaded for both counts as required under rule 541(B) of the Rules of

Procedure of the State Bar thus on the issue of notice Martin received due process

As for Martinrsquos second argument that the language of rule 4-100(A) and case law failed

to give him adequate notice his acts of depositing only his personal funds in his CTA and

payment of his personal expenses from it were improper this argument also fails Contrary to

his assertion rule 4-100(A) is explicit in that personal funds cannot be placed into a CTA ldquoNo

funds belonging to the member or the law firm shall be deposited [into the CTA] or otherwise

commingled rdquo Martinrsquos testimony that the phrase ldquoor otherwise commingledrdquo led him to

-5-

believe he was not violating rule 4-100(A) when only his personal funds were deposited into the

CTA is simply an unreasonable interpretation of the rule given the language before that phrase

clearly prohibits such an action To his point that case law did not provide him adequate notice

we first note his testimony at trial was quite clear that he did not do any case research on the

issue when the State Bar contacted him about his NSF checks Nonetheless the Supreme Court

has interpreted rule 4-100(A) as a bright-line rule that ldquoabsolutely bars use of the trust account

for personal purposes even if client funds are not on depositrdquo (Doyle v State Bar supra

32 Cal3d at pp 22ndash23) Martinrsquos argument that the Doyle case is inapplicable because the

attorney had client funds in the CTA at some point that he later misappropriated simply ignores

the salient point the Supreme Court was making concerning the rule Thus by depositing

personal funds into a CTA and paying personal expenses from it Martin willfully violated the

express language of rule 4-100(A) and the Supreme Courtrsquos clear declaration of how the rule

applies7

Accordingly his misuse of his CTA establishes culpability under counts one and two8

7 The State Barrsquos Handbook on Client Trust Accounting also describes the prohibition

against using a CTA for personal use ldquoYou canrsquot make payments out of your client trust bank

account to cover your own expenses personal or business or for any other purpose that isnt

directly related to carrying out your duties to an individual clientrdquo (The State Bar of Cal

Handbook on Client Trust Accounting for California Attorneys (2018) (ldquoHandbookrdquo) sect VI

p 17) The Handbook is available online at the following website

httpwwwcalbarcagovPortals0documentsethicsPublicationsCTA-Handbookpdf

8 Additionally Martin briefly argues he had a good faith belief that he was not violating

rule 4-100(A) Even if true his good faith belief does not excuse his culpability (Heavey v

State Bar (1976) 17 Cal3d 553 558 [good faith is not defense to commingling charge])

-6-

9IV MITIGATION OUTWEIGHS AGGRAVATION

Standard 15 requires OCTC to establish aggravating circumstances by clear and

convincing evidence10

Standard 16 requires Martin to meet the same burden to prove

mitigation

A Aggravation

1 Multiple Acts (Std 15(b))

The hearing judge found Martinrsquos multiple commingling violations over an eight-month

period11

to be an aggravating circumstance under standard 15(b) and assigned moderate weight

because these acts did not occur over a lengthy period Martin challenges this finding by arguing

that his multiple improper CTA transactions constitute only one continuous act in the course of

conduct While not appealing OCTC nonetheless urges us to assign significant weight in

aggravation for this factor because Martin improperly used his CTA on at least 168 occasions

We agree with the hearing judgersquos approach and reject both Martinrsquos and OCTCrsquos

arguments We have held that ldquomultiple acts of misconduct as aggravation are not limited to the

counts pleaded [Citation]rdquo (In the Matter of Song (Review Dept 2013) 5 Cal State Bar Ct

Rptr 273 279) Here Martinrsquos culpability is for two counts of misconduct that encompass 168

separate acts as established by the Stipulation However based on case law we do not find that

his conduct warrants substantial aggravation for multiple acts because his misconduct occurred

9 Martin requests ldquoa de novo reconsideration of aggravating and mitigating factorsrdquo For

all issues in this proceeding including aggravating and mitigating factors we ldquoindependently

review the record and may make findings conclusions or a decision or recommendation

different from those of the hearing judgerdquo (Rules Proc of State Bar rule 5155(A))

10 Clear and convincing evidence leaves no substantial doubt and is sufficiently strong to

command the unhesitating assent of every reasonable mind (Conservatorship of Wendland

(2001) 26 Cal4th 519 552)

11 The hearing judge incorrectly stated that Martinrsquos misconduct occurred over an eight-

month period The Stipulation states that Martinrsquos commingling violations happened over a

10-month period from October 1 2016 through July 26 2017

-7-

over only 10 months (See In the Matter of Song supra 5 Cal State Bar Ct Rptr at p 279

[significant aggravation for 65 improper CTA violations involving client harm over three-year

period] see also In the Matter of Guzman (Review Dept 2014) 5 Cal State Bar Ct Rptr 308

317 [significant weight in aggravation for 24 counts of misconduct involving harm to multiple

clients over four-year period])

2 Uncharged Misconduct (Std 15(h))

Under standard 15(h) aggravating circumstances may include ldquouncharged violations of

the Business and Professions Code or the Rules of Professional Conductrdquo The hearing judge

found significant aggravation based on an uncharged violation of rule 4ndash100(A) in concluding

that Martinrsquos testimony revealed he had been commingling since 2004 not just from October

2016 through July 2017 as charged in the NDC

Martin objects to this finding arguing that the hearing judgersquos conclusion is based upon

an erroneous factual conclusion drawn from his testimony While Martin acknowledged at trial

that he opened his CTA in 2004 he further testified he did not use it at all until 2012 when

setting up direct deposit for his Legal Management Quickbooks paychecks Despite this

testimony OCTC never raised uncharged misconduct during trial or in its posttrial closing brief

Consequently Martin did not have an opportunity to defend himself during trial against this

uncharged violation Accordingly we decline to find additional aggravation (See In the Matter

of Lenard (Review Dept 2013) 5 Cal State Bar Ct Rptr 250 260 [no aggravation for

uncharged misconduct where attorney did not have sufficient notice or opportunity to defend

after OCTC became aware of relevant facts])

-8-

B Mitigation

1 No Prior Record of Discipline (Std 16(a))

Mitigation is available under standard 16(a) where no prior record of discipline exists

over many years of practice coupled with present misconduct that is not likely to recur The

hearing judge determined Martinrsquos misconduct began in 2004 finding only seven years of

discipline-free practice and affording him minimal mitigation Martin requests that significant

weight be given OCTC agrees with the judgersquos assignment of minimal weight

While we do not adopt the hearing judgersquos finding of uncharged misconduct in

aggravation our independent review of the record reveals that Martinrsquos misconduct began in

2012 which equates to 15 years of discipline-free practice12

The record also reflects that

Martinrsquos misconduct was aberrational (Cooper v State Bar (1987) 43 Cal3d 1016 1029 [prior

record of discipline-free practice is most relevant where misconduct is aberrational and unlikely

to recur]) He testified he understands now that personal funds can never be deposited into a

CTA and that personal expenses cannot be paid from a CTA Further he asserts that if he were

required to maintain client funds in the future he would associate with an attorney who would be

fully responsible for managing the CTA Thus Martinrsquos 15 years of discipline-free practice are

entitled to substantial weight in mitigation (In the Matter of Yee (Review Dept 2014) 5 Cal

State Bar Ct Rptr 330 335 [significant weight in mitigation for 10 and one-half years of

discipline-free practice] Hawes v State Bar (1990) 51 Cal3d 587 596 [significant weight in

mitigation for over 10 years of discipline-free practice])

12 The hearing judge erroneously concluded that Martin began using his CTA for

personal deposits in 2004 when in fact based on his unrebutted testimony he opened the CTA

in 2004 and began to use it in 2012

-9-

2 No Client Harm (Std 16(c))

Standard 16(c) provides for mitigation where lack of harm to clients the public or the

administration of justice can be established The hearing judge found Martinrsquos use of his CTA as

a personal checking account did not cause any client harm and afforded moderate weight

Martin requests that a greater weight be given to this circumstance OCTC does not object to the

finding of moderate weight but it argues that greater weight should not be given because ldquo[t]here

is always the potential for harmrdquo OCTCrsquos argument is at best speculative We find substantial

weight should be given because no evidence in the record demonstrates any harm was caused to

clients the public or the administration of justice

3 Good Faith (Std 16(b))

An attorney may be entitled to mitigation credit if he can establish a ldquogood faith belief

that is honestly held and objectively reasonablerdquo (Std 16(b) see also In the Matter of Rose

(Review Dept 1997) 3 Cal State Bar Ct Rptr 646 653) The hearing judge found Martin was

not entitled to mitigation for his good faith belief that he was not violating any trust accounting

rule by using his CTA as a personal account where the account did not hold client funds Martin

contends he honestly believed his CTA activities were proper and not an ethical violation He

also argues that his interactions with OCTC during its investigation made his reliance on his

beliefs objectively reasonable OCTC argues that Martin is not entitled to any good faith

mitigation because his ignorance of rule 4-100 is objectively unreasonable particularly since he

was provided with copies of the rule on multiple occasions

Martin acknowledged receiving a copy of the complete text of rule 4-100 when OCTC

mailed its first investigative letter to him in December 2016 Martin also testified that he

reviewed the rule after receiving it Even if he honestly believed his CTA usage did not run

afoul of rule 4-100(A) it was objectively unreasonable for him to continue to use his CTA for

-10-

personal matters until July 2017 in light of the clear language of the rule We therefore assign

no mitigation credit for good faith (Sternlieb v State Bar (1990) 52 Cal3d 317 331

[attorneyrsquos honest belief not mitigating because belief was unreasonable])

4 Extraordinary Good Character (Std 16(f))

Martin is entitled to mitigation if he establishes ldquoextraordinary good character attested to

by a wide range of references in the legal and general communities who are aware of the full

extent of the misconductrdquo (Std 16(f)) Three witnesses including his son and two attorneys

testified at trial regarding Martinrsquos good character The hearing judge reduced the weight

accorded to two of his character references based upon a finding of ldquoobvious biasrdquo and assigned

minimal weight to this mitigating circumstance OCTC agrees with the judgersquos determination

We disagree with the judgersquos approach and assign moderate weight

All three witnesses were fully aware of the charges against Martin and praised his

excellent reputation as a criminal defense attorney In fact one of the attorney witnesses

represented Martin during the OCTC investigation and trial in this matter The other attorney

witness had previously worked with Martin and attested to his strong work ethic and

commitment to serve others (In the Matter of Brown (Review Dept 1993) 2 Cal State Bar Ct

Rptr 309 319 [serious consideration given to attorneysrsquo testimony due to their ldquostrong interest in

maintaining the honest administration of justicerdquo])

Although some of Martinrsquos good character testimony was offered by a family member

and his former counsel any bias they might have due to their connections should not be

disqualifying but considered in weighing the evidence (In the Matter of Davis supra 4 Cal

State Bar Ct Rptr at p 592 [testimony of acquaintances neighbors friends associates

employers and family members who had broad knowledge of attorneyrsquos good character work

habits and professional skills entitled to great weight]) However Martinrsquos son was only 20

-11-

years old when he testified one attorney witness had known Martin for 10 years and the other

had only known him for five years which is factually different than the three witnesses in Davis

who each had been acquainted with that attorney for 10 years or more Therefore we find

Martin is entitled to moderate weight for establishing good character

5 Cooperation (Std 16(e))

Mitigation may be assigned under standard 16(e) for cooperation with the State Bar The

hearing judge afforded significant mitigation for this circumstance which Martin agrees is

appropriate OCTC requests we reduce the weight for this circumstance because Martin did not

stipulate to culpability Before trial Martin stipulated to facts central to establishing the two

charged counts as well as the admission of documents However he did not admit culpability

and ldquomore extensive weight in mitigation is accorded those who where appropriate willingly

admit their culpability as well as the factsrdquo (In the Matter of Johnson (Review Dept 2000)

4 Cal State Bar Ct Rptr 179 190) Since Martin stipulated only to facts and not to culpability

we reduce the weight given here to moderate for his cooperation

6 Martinrsquos Requests for Additional Mitigation (Stds 16(g) (h) (i) and (j))

Martin seeks additional mitigation arguing that he took prompt action to rectify ethical

issues and that the State Bar delayed for over a year in bringing charges He also argues he

should receive mitigation because he voluntarily closed his CTA before charges were brought

We do not find clear and convincing evidence supporting the additional mitigation Martin

requests His actions were not prompt because he continued to use his CTA improperly until

July 2017 even though the State Bar contacted him months earlier Further Martin showed no

delay and no prejudice by OCTC waiting 17 months to file the NDC Finally we fail to see

how the fact that Martin closed the CTA before charges were filed qualifies under any

standard 16 mitigating circumstances

-12-

V PUBLIC REPROVAL IS APPROPRIATE DISCIPLINE

The purpose of attorney discipline is not to punish the attorney but to protect the public

the courts and the legal profession to preserve public confidence in the profession and to

maintain high standards for attorneys (Std 11) Our analysis begins with the standards which

although not binding are entitled to great weight (In re Silverton (2005) 36 Cal4th 81 92) If

we depart from the standards we must articulate clear reasons for doing so (Blair v State

Bar (1989) 49 Cal3d 762 776 fn 5) In determining the appropriate discipline we also look to

case law for guidance (See Snyder v State Bar (1990) 49 Cal3d 1302 1310ndash1311) and observe

ldquoThe well-settled rule is that the degree of professional discipline is not derived from a fixed

formula but from a balanced consideration of all factorsrdquo (In the Matter of Respondent X

(Review Dept 1997) 3 Cal State Bar Ct Rptr 592 605)

Standard 22(a) is the applicable standard as it specifies ldquoActual suspension of three

months is the presumed sanction for commingling rdquo The hearing judge recommended a

90-day actual suspension which reflects the presumed sanction and OCTC urges us to affirm

the judgersquos recommendation Martin asks that we impose a private reproval arguing his

misconduct does not fall squarely within standard 22(a) but is more adequately addressed by

standard 22(b)13 regarding ldquoother trust account violationsrdquo Since we found Martin culpable of

commingling we reject this argument

Martin also argues standard 17(c)14

applies here to justify a downward departure from

the presumed discipline under standard 22(a) He argues the record demonstrates that he meets

13 Standard 22(b) provides that ldquoSuspension or reproval is the presumed sanction for any

other violation of [rule 4-100]rdquo

14 Standard 17(c) provides ldquoIf mitigating circumstances are found they should be

considered alone and in balance with any aggravating circumstances and if the net effect

demonstrates that a lesser sanction is needed to fulfill the primary purposes of discipline it is

appropriate to impose or recommend a lesser sanction than what is otherwise specified in a given

-13-

the criteria of the standard and therefore a reproval is warranted While OCTC does not

specifically respond to Martinrsquos argument that standard 17(c) applies in this case OCTC points

to the case relied upon by the hearing judge along with other cases to support its conclusion that

the judgersquos recommendation of a 90-day actual suspension should be upheld

The hearing judge considered In the Matter of Bleecker (Review Dept 1990) 1 Cal State

Bar Ct Rptr 113 to be the most applicable In Bleecker an attorney received a 60-day actual

suspension for commingling and two counts of moral turpitude for his grossly negligent

misappropriation of $270 and misusing his CTA to conceal assets from levy by the Internal

Revenue Service The judge determined that while not as serious as the misconduct in Bleecker

Martinrsquos misconduct nonetheless warranted greater discipline than the discipline recommended

in Bleecker as that attorney had ldquoa far greater amount of mitigation [and] an absence of any

aggravationrdquo15

Further the judge found the attorneyrsquos misconduct in Bleecker ldquotook place over

a limited time periodrdquo (five months) as opposed to Martinrsquos misconduct (10 months)

First we find that a five-month difference in length of misconduct between these two cases

does not merit the distinction the hearing judge found Additionally because we only find one

aggravating circumstance instead of two as the judge found and provide more weight overall to

Martinrsquos mitigating circumstances we do not agree with the judge that for these reasons Martinrsquos

discipline should be greater than in Bleecker Further the focus of the disciplinary analysis in

Bleecker was on that attorneyrsquos misappropriation and concealment of his assets and not

Standard On balance a lesser sanction is appropriate in cases of minor misconduct where there

is little or no injury to a client the public the legal system or the profession and where the

record demonstrates that the member is willing and has the ability to conform to ethical

responsibilities in the futurerdquo

15 The opinion provides that the attorney in Bleecker established five mitigating

circumstances financial pressures leading to a cash shortage the attorney hired a business

consultant to remedy his business practices no client was harmed the attorney admitted misuse

of his CTA and five years had passed since the misconduct had occurred

-14-

commingling which led to the 60-day actual suspension recommendation16

For these reasons we

decline to apply Bleecker to Martinrsquos relatively limited misconduct of commingling

OCTC also urges us to consider three additional cases In the Matter of McKiernan

(Review Dept 1995) 3 Cal State Bar Ct Rptr 42017

In the Matter of Heiser (Review Dept

1990) 1 Cal State Bar Ct Rptr 4718

and In the Matter of Doran (Review Dept 1998) 3 Cal

State Bar Ct Rptr 87119

In considering McKiernan in which we recommended the same

16 In Bleecker because of multiple culpability findings the disciplinary standard applied

was the ldquomost severerdquo pursuant to former standard 16(a) which was determined to be former

standard 22(a) That standard provided for disbarment for misappropriation of entrusted funds

unless the amount of funds misappropriated was insignificantly small or the most compelling

mitigating circumstances clearly predominated in which case a minimum of a one-year actual

suspension should be imposed We decided to also apply former standard 16(b)(2) which is

substantially similar to standard 17(c) to go below former standard 22(a)rsquos one-year minimum

because of the attorneyrsquos mitigation and that he was ldquonot a venal person and his misconduct

was aberrationalrdquo (In the Matter of Bleecker supra 1 Cal State Bar Ct Rptr at p 127)

17 In McKiernan we recommended a 90-day actual suspension for an attorney culpable of

commingling and moral turpitude by gross negligence for issuing two NSF checks to a business

when he knew insufficient funds were in the CTA to cover payment The attorney took over

three years to finally pay the amount owed to the business and only after it had filed a complaint

with the State Bar for which moral turpitude was also found The attorneyrsquos misconduct was

aggravated by indifference for failing to repay at least part of the money for a pattern of

misconduct given he repeatedly misused his CTA over a prolonged period of time and multiple

acts but mitigated by candor and cooperation remorse and recognition of wrongdoing 21 years

of discipline-free practice (reduced because for 18 years he never managed his CTA) and

limited weight for good character evidence

18 In Heiser we recommended that the attorney be actually suspended for six months He

was found culpable for commingling and for moral turpitude by writing NSF checks from his

personal account and his closed CTA His multiple aggravating circumstances outweighed his

one mitigating circumstance Further the attorney did not pay two of his NSF checks and the

other two were not paid until the police were involved and legal proceedings commenced thus

causing those two people added expense to obtain their funds Finally the attorney in Heiser did

not cooperate with the State Bar investigators and also did not appear for his disciplinary trial

19 In Doran we also recommended that the attorney be actually suspended for six

months The attorney commingled for a period of almost three years and engaged in acts of

moral turpitude by gross negligence when he issued 17 NSF checks He testified he had no

understanding of the purpose of a trust account nor did he understand the concept of

commingling He also was found culpable for acting incompetently when he abandoned a client

in one matter and took a position against a client in order to avoid being sanctioned in another

uncharged matter His multiple aggravating circumstances outweighed his one mitigating

circumstance Central to the recommended discipline was our observation from the entire record

-15-

discipline of 90 daysrsquo actual suspension as OCTC argues is appropriate here we do not find that

case sufficiently analogous due to the more extensive misconduct found beyond commingling

and the mitigating circumstances not clearly outweighing the aggravating circumstances as they

do for Martin For the same reasons we find even less guidance from Heiser or Doran where

in each case the misconduct was more extensive and the aggravation outweighed the mitigation

resulting in a recommendation of six monthsrsquo actual suspension

Most notably in all three cases cited by OCTC clients were harmed in Martinrsquos case no

client was harmed or in danger of being harmed because Martinrsquos unrebutted testimony is that he

had always understood his personal funds could not be in the CTA if client money was there

Therefore contrary to the hearing judgersquos conclusion Martin was not ldquowholly oblivious to his

ethical obligations in handling his CTArdquo Martin honestly20

but unreasonably misunderstood that

rule 4-100(A) did not permit him to have personal funds in the CTA at any time except under

two strict conditions not involved here His misunderstanding resulted in his misconduct

continuing after receiving multiple investigative letters from the State Bar for his NSF charges

and OCTC argues this point repeatedly in asserting its position that Martinrsquos misconduct

deserves an actual suspension of 90 days However if OCTC had simply and clearly pointed out

early in the investigative phase how Martinrsquos actions ran afoul of rule 4-100(A) he might have

made the necessary changes earlier than he did21

that the attorney demonstrated he was ldquototally obliviousrdquo to his obligations as a lawyer and we

had great concern his lack of understanding of his obligations as an attorney posed a risk to the

public (In the Matter of Doran supra 3 Cal State Bar Ct Rptr at p 881)

20 During its questioning of Martin during trial OCTC failed to establish he was placing

his personal money into the CTA for a dishonest motive including that he was hiding his money

from lien collection efforts or from his ex-wife

21 The record shows that as early as February 7 2017 his then-counsel wrote the OCTC

investigator and disclosed Martin was depositing his paychecks into the CTA and paying

personal expenses from it

-16-

We agree with Martin that the requirements of standard 17(c) have been met and the

overall record supports a downward departure from the 90-day actual suspension as the

presumed sanction under standard 22(a) His multiple mitigating circumstances including a 15-

year discipline-free record no client harm character witnesses who credibly testified to his

reputation for integrity and his cooperation candor and honesty during the investigation and

disciplinary trial clearly outweigh his one aggravating circumstance of multiple acts The net

effect demonstrates that a lesser discipline is warranted to fulfill the primary purposes of

discipline Further Martinrsquos rule violations are minor misconduct as no client was harmed and

his actions were honest and aberrational demonstrating that he has the ability to conform to

ethical responsibilities in the future Given these findings a public reproval with the conditions

that Martin attend and successfully complete the State Barrsquos Ethics School and Client Trust

Accounting School is appropriate discipline to protect the public the courts and the legal

profession22

VI ORDER

Joseph Earl Martin is ordered publicly reproved to be effective 15 days after service of this

opinion and order (Rules Proc of State Bar rule 5127(A)) He must comply with the specified

conditions attached to the public reproval (Rules Proc of State Bar rule 5128) Failure to

comply with this condition may constitute cause for a separate proceeding for willful breach of

rule 811 of the Rules of Professional Conduct that are currently in effect

Martin is ordered to comply with the following conditions Within one year of the

effective date of this public reproval he must submit to the Office of Probation satisfactory

evidence of completion of Ethics School and passage of the test given at the end of that

22 Rule 5127(B) of the Rules of Procedure of the State Bar provides ldquoA public reproval

is part of the attorneyrsquos official State Bar attorney records is disclosed in response to public

inquiries and is reported as a record of public discipline on the State Barrsquos web page The

record of the proceeding in which the public reproval was imposed is also publicrdquo

-17-

session Within one year of the effective date of this public reproval he must also submit to the

Office of Probation satisfactory evidence of completion of Client Trust Accounting School and

passage of the test given at the end of that session Both requirements are separate from any

Minimum Continuing Legal Education (MCLE) requirement and he shall not receive MCLE

credit for attending either Ethics School or Client Trust Accounting School (Rules Proc of

State Bar rule 3201)

VII COSTS

Costs are awarded to the State Bar in accordance with Business and Professions Code

section 608610 and are enforceable both as provided in Business and Professions Code

section 61407 and as a money judgment

McGILL J

WE CONCUR

PURCELL P J

HONN J

-18-

No 16-O-17714

In the Matter of

JOSEPH EARL MARTIN

Hearing Judge

Hon Manjari Chawla

Counsel for the Parties

For Office of Chief Trial Counsel Rachel Simone Grunberg

Office of Chief Trial Counsel

The State Bar of California

180 Howard Street

San Francisco CA 94105

rachelgrunbergcalbarcagov

For Joseph Earl Martin Joseph E Martin in pro per

Law Offices of Jem Martin

2121 Natomas Crossing Drive 200-2

Sacramento CA 95834

martinjemhotmailcom

-19-

due process and thus should not be found culpable for violating the rule Finally Martin also

asserts he has sufficient mitigation to warrant less discipline and seeks a private reproval The

Office of Chief Trial Counsel of the State Bar (OCTC) does not appeal the hearing judgersquos

findings and requests that we uphold her recommendation

Based on our independent review of the record (Cal Rules of Court rule 912) we affirm

the hearing judgersquos culpability findings because commingling within the meaning of rule 4-100(A)

occurs when an attorney maintains personal funds in a CTA even if no client funds are in the

account (Doyle v State Bar (1982) 32 Cal3d 12 22ndash23) We do however find aggravation for

only one of the two aggravating circumstances found by the judge and give more weight to

Martinrsquos mitigating circumstances Overall the mitigation clearly outweighs the aggravation and

therefore we conclude the record supports a downward departure under the standards We order

Martin be publicly reproved with conditions which will under the circumstances established here

be sufficient to protect the public the courts and the legal profession

I PROCEDURAL BACKGROUND

OCTC filed a NDC on December 6 2018 alleging two counts of misconduct against

Martin both charging violations of rule 4-100(A) A one-day trial took place on April 5 2019

Before the trial on April 4 the parties filed a pretrial Stipulation as to Facts and Admission of

Documents (Stipulation)3

The hearing judge issued her decision on July 15 2019 following a

period for posttrial briefing

3 At the beginning of the trial the hearing judge granted Martinrsquos request to withdraw

from stipulating to the admission of bank records as exhibits based on his argument that his

stipulation of facts rendered those records unnecessary A review of the transcript shows many

exhibits were only partially admitted with OCTC agreeing that some records that had been

contained in the Stipulation did not need to be admitted

-2-
































-3-
























all membersrdquo

-4-








as charged We agree

















-5-













applies7












-6-





mitigation

A Aggravation



period11


















(2001) 26 Cal4th 519 552)




-7-






















-8-

B Mitigation
























-9-

























-10-

























-11-

























-12-




























-13-












aggravationrdquo15

















-14-













































-15-





























-16-













profession22

VI ORDER













-17-







VII COSTS




McGILL J

WE CONCUR

PURCELL P J

HONN J

-18-

No 16-O-17714

In the Matter of

JOSEPH EARL MARTIN

Hearing Judge

Hon Manjari Chawla





180 Howard Street






Sacramento CA 95834

martinjemhotmailcom

-19-
































-3-
























all membersrdquo

-4-








as charged We agree

















-5-













applies7












-6-





mitigation

A Aggravation



period11


















(2001) 26 Cal4th 519 552)




-7-






















-8-

B Mitigation
























-9-

























-10-

























-11-

























-12-




























-13-












aggravationrdquo15

















-14-













































-15-





























-16-













profession22

VI ORDER













-17-







VII COSTS




McGILL J

WE CONCUR

PURCELL P J

HONN J

-18-

No 16-O-17714

In the Matter of

JOSEPH EARL MARTIN

Hearing Judge

Hon Manjari Chawla





180 Howard Street






Sacramento CA 95834

martinjemhotmailcom

-19-
























all membersrdquo

-4-








as charged We agree

















-5-













applies7












-6-





mitigation

A Aggravation



period11


















(2001) 26 Cal4th 519 552)




-7-






















-8-

B Mitigation
























-9-

























-10-

























-11-

























-12-




























-13-












aggravationrdquo15

















-14-













































-15-





























-16-













profession22

VI ORDER













-17-







VII COSTS




McGILL J

WE CONCUR

PURCELL P J

HONN J

-18-

No 16-O-17714

In the Matter of

JOSEPH EARL MARTIN

Hearing Judge

Hon Manjari Chawla





180 Howard Street






Sacramento CA 95834

martinjemhotmailcom

-19-








as charged We agree

















-5-













applies7












-6-





mitigation

A Aggravation



period11


















(2001) 26 Cal4th 519 552)




-7-






















-8-

B Mitigation
























-9-

























-10-

























-11-

























-12-




























-13-












aggravationrdquo15

















-14-













































-15-





























-16-













profession22

VI ORDER













-17-







VII COSTS




McGILL J

WE CONCUR

PURCELL P J

HONN J

-18-

No 16-O-17714

In the Matter of

JOSEPH EARL MARTIN

Hearing Judge

Hon Manjari Chawla





180 Howard Street






Sacramento CA 95834

martinjemhotmailcom

-19-













applies7












-6-





mitigation

A Aggravation



period11


















(2001) 26 Cal4th 519 552)




-7-






















-8-

B Mitigation
























-9-

























-10-

























-11-

























-12-




























-13-












aggravationrdquo15

















-14-













































-15-





























-16-













profession22

VI ORDER













-17-







VII COSTS




McGILL J

WE CONCUR

PURCELL P J

HONN J

-18-

No 16-O-17714

In the Matter of

JOSEPH EARL MARTIN

Hearing Judge

Hon Manjari Chawla





180 Howard Street






Sacramento CA 95834

martinjemhotmailcom

-19-





mitigation

A Aggravation



period11


















(2001) 26 Cal4th 519 552)




-7-






















-8-

B Mitigation
























-9-

























-10-

























-11-

























-12-




























-13-












aggravationrdquo15

















-14-













































-15-





























-16-













profession22

VI ORDER













-17-







VII COSTS




McGILL J

WE CONCUR

PURCELL P J

HONN J

-18-

No 16-O-17714

In the Matter of

JOSEPH EARL MARTIN

Hearing Judge

Hon Manjari Chawla





180 Howard Street






Sacramento CA 95834

martinjemhotmailcom

-19-






















-8-

B Mitigation
























-9-

























-10-

























-11-

























-12-




























-13-












aggravationrdquo15

















-14-













































-15-





























-16-













profession22

VI ORDER













-17-







VII COSTS




McGILL J

WE CONCUR

PURCELL P J

HONN J

-18-

No 16-O-17714

In the Matter of

JOSEPH EARL MARTIN

Hearing Judge

Hon Manjari Chawla





180 Howard Street






Sacramento CA 95834

martinjemhotmailcom

-19-

B Mitigation
























-9-

























-10-

























-11-

























-12-




























-13-












aggravationrdquo15

















-14-













































-15-





























-16-













profession22

VI ORDER













-17-







VII COSTS




McGILL J

WE CONCUR

PURCELL P J

HONN J

-18-

No 16-O-17714

In the Matter of

JOSEPH EARL MARTIN

Hearing Judge

Hon Manjari Chawla





180 Howard Street






Sacramento CA 95834

martinjemhotmailcom

-19-

























-10-

























-11-

























-12-




























-13-












aggravationrdquo15

















-14-













































-15-





























-16-













profession22

VI ORDER













-17-







VII COSTS




McGILL J

WE CONCUR

PURCELL P J

HONN J

-18-

No 16-O-17714

In the Matter of

JOSEPH EARL MARTIN

Hearing Judge

Hon Manjari Chawla





180 Howard Street






Sacramento CA 95834

martinjemhotmailcom

-19-

























-11-

























-12-




























-13-












aggravationrdquo15

















-14-













































-15-





























-16-













profession22

VI ORDER













-17-







VII COSTS




McGILL J

WE CONCUR

PURCELL P J

HONN J

-18-

No 16-O-17714

In the Matter of

JOSEPH EARL MARTIN

Hearing Judge

Hon Manjari Chawla





180 Howard Street






Sacramento CA 95834

martinjemhotmailcom

-19-

























-12-




























-13-












aggravationrdquo15

















-14-













































-15-





























-16-













profession22

VI ORDER













-17-







VII COSTS




McGILL J

WE CONCUR

PURCELL P J

HONN J

-18-

No 16-O-17714

In the Matter of

JOSEPH EARL MARTIN

Hearing Judge

Hon Manjari Chawla





180 Howard Street






Sacramento CA 95834

martinjemhotmailcom

-19-




























-13-












aggravationrdquo15

















-14-













































-15-





























-16-













profession22

VI ORDER













-17-







VII COSTS




McGILL J

WE CONCUR

PURCELL P J

HONN J

-18-

No 16-O-17714

In the Matter of

JOSEPH EARL MARTIN

Hearing Judge

Hon Manjari Chawla





180 Howard Street






Sacramento CA 95834

martinjemhotmailcom

-19-












aggravationrdquo15

















-14-













































-15-





























-16-













profession22

VI ORDER













-17-







VII COSTS




McGILL J

WE CONCUR

PURCELL P J

HONN J

-18-

No 16-O-17714

In the Matter of

JOSEPH EARL MARTIN

Hearing Judge

Hon Manjari Chawla





180 Howard Street






Sacramento CA 95834

martinjemhotmailcom

-19-













































-15-





























-16-













profession22

VI ORDER













-17-







VII COSTS




McGILL J

WE CONCUR

PURCELL P J

HONN J

-18-

No 16-O-17714

In the Matter of

JOSEPH EARL MARTIN

Hearing Judge

Hon Manjari Chawla





180 Howard Street






Sacramento CA 95834

martinjemhotmailcom

-19-





























-16-













profession22

VI ORDER













-17-







VII COSTS




McGILL J

WE CONCUR

PURCELL P J

HONN J

-18-

No 16-O-17714

In the Matter of

JOSEPH EARL MARTIN

Hearing Judge

Hon Manjari Chawla





180 Howard Street






Sacramento CA 95834

martinjemhotmailcom

-19-













profession22

VI ORDER













-17-







VII COSTS




McGILL J

WE CONCUR

PURCELL P J

HONN J

-18-

No 16-O-17714

In the Matter of

JOSEPH EARL MARTIN

Hearing Judge

Hon Manjari Chawla





180 Howard Street






Sacramento CA 95834

martinjemhotmailcom

-19-







VII COSTS




McGILL J

WE CONCUR

PURCELL P J

HONN J

-18-

No 16-O-17714

In the Matter of

JOSEPH EARL MARTIN

Hearing Judge

Hon Manjari Chawla





180 Howard Street






Sacramento CA 95834

martinjemhotmailcom

-19-

No 16-O-17714

In the Matter of

JOSEPH EARL MARTIN

Hearing Judge

Hon Manjari Chawla





180 Howard Street






Sacramento CA 95834

martinjemhotmailcom

-19-